K2.7b lawsuit

PROMINENT Madang businessman Peter Yama has filed a lawsuit for K2.7 billion against Bank South Pacific (BSP) for alleged corporate fraud against the Yama Group of Companies.

The former MP and State minister said he was suing BSP for a number of illegal actions, including fixed and floating charges allegedly imposed fraudulently on his companies without their knowledge in 2000.

Yama said the fixed and floating charges were approved by then BSP managing director Garth McIllwain, who was charged by the State with forging Yama company documents on May 6, 1999 when he was not yet employed by the bank.

He said BSP’s actions had resulted in bankruptcy of most of his companies.

“This will be the biggest lawsuit yet in the Southern Hemisphere,” Yama announced at a press conference after his lawyer Ben Lomai filed the writ of summons at the Waigani National Court on Friday.

Yama claimed BSP’s actions were like a vendetta against him for his stiff opposition to its takeover of the Papua New Guinea Banking Corporation in 2002.

He said the lawsuit was based on National and Supreme Court decisions in 2011 and 2014 that found, among others, that the fixed and floating charges imposed by BSP on the Yama Group were fraudulent and illegal.

Yama’s 24-page writ of summons alleged, among others, that BSP opened and operated accounts for Smugglers Inn Resort and Neisenel No 77 real estate company without their knowledge, consent or approval and paid itself, its lawyers, others and even transferred funds out of the country in Australian dollars that left the two companies in debts of more than K37 million which they had to service. The writ of summons listed in detail particulars of defamation or injury to reputation, negligence, ill-will and malice by the bank towards Yama and his companies. “BSP’s actions resulted in considerable damage to the Yama Group of Companies and great suffering for me, my families and staff,” Yama said.

“It took me years, after the courts’ decisions in my favour, as to what course of action I would take.

“My properties were sold by the bank and some retained through vigorous court battles.

“I thank God for giving me the right heart to fight all thing things with humility, perseverance and tolerance. Sadly, my deputy died from heart failure and two senior managers have also died from serious illness.

“I have filed a lawsuit against the bank for the bankruptcy of my eight companies, my employees and my families.

“This matter will go back to the court to be settled once and for all.”